Exhibit 99.1
VSE REPORTS FINANCIAL RESULTS FOR 2004
Fourth Quarter 2004 Compared to Fourth Quarter 2003:
o Revenues Up 35% to $57.1 Million
o Net Income Up 61% to $997 Thousand
o Earnings Per Share Up 54% to $.43 Per Diluted Share
Alexandria, Virginia, February 22, 2005 - VSE Corporation (Nasdaq: VSEC)
reported revenues of $57.1 million and earnings of $997 thousand for the three-
month period ended December 31, 2004, compared to revenues of $42.2 million and
earnings of $620 thousand for the same period of 2003.
During the quarter the company experienced significant revenue increases
in VSE's International and Federal operating groups. Profits increased based on
the higher business volume and on a lower rate for fixed corporate costs based
on the overall volume increase.
Chairman and CEO Don Ervine commented, "VSE performed very well during
the fourth quarter and in 2004, exceeding our $200 million annual revenue goal
for the first time. An increase in profits followed the revenue growth. All of
this comes from the hard work of VSE managers and employees to identify and meet
customer requirements. By continuing to serve our customers first, we expect to
grow our business and continuously identify new opportunities for service."
Year Ended December 31, 2004, Compared to Year Ended December 31, 2003:
o Revenues Up 62% to $216.0 Million
o Net Income Up 71% to $3.4 Million
o Earnings Per Share Up 65% to $1.49 Per Diluted Share
o Funded Backlog Up 102% to $168 Million
o Return on Equity Tops 18%
VSE experienced a record year in 2004 and, based on projected activity
under existing contracts, expects further growth in 2005. The ship transfer work
performed by our BAV Division led our growth in 2004, and it is expected to
contribute significantly to our revenues through 2006. Other previously
announced indefinite quantity, indefinite delivery contracts won in 2003 and
2004 also contributed in 2004 and are expected to contribute in 2005 and beyond.
In addition, our Systems Engineering Division was awarded a contract in 2004 to
provide the U.S. Army with an innovative, self-sealing fuel tanker system which
could be important for VSE growth in 2005. During 2004 we significantly
increased our support to the U.S. Air Force, and we were awarded new contracts
to establish Army programs in corrosion control and driver vehicle upgrade kits.
Our subsidiary Energetics is recognized as a global leader in developing
technology roadmaps and also participated on the winning team to support the
National Energy Technology Laboratory. We continue to identify new bidding
opportunities, and our success rate is improving. Our funded backlog at
December 31, 2004, stood at $168 million, promising a fast start towards our
goals for 2005.
Chairman and CEO Don Ervine continued, "During 2004 we experienced
significant increases in revenues, profits, return on equity, employees, and
customers. We increased our cash dividend by 25%, and our stock price reflected
an increase in shareholder value. These are excellent goals to exceed in 2005
and beyond, and I look forward to reporting on our progress."
-more-
VSE Corporation News Release (continued)
VSE Corporation and Subsidiaries
Consolidated Statements of Income (unaudited)
(in thousands, except share and per share amounts)
________________________________________________________________________________________________________
Three Months Twelve Months
Ended December 31, Ended December 31,
2004 2003 2004 2003
---- ---- ---- ----
Revenues, principally from contracts $ 57,142 $ 42,185 $ 216,011 $ 133,059
Costs and expenses of contracts 55,336 40,988 209,841 129,372
--------- --------- --------- ---------
Gross profit 1,806 1,197 6,170 3,687
Selling, general and administrative expenses 186 193 636 351
Interest income, net (26) (20) (102) (69)
--------- --------- --------- ---------
Income before income taxes 1,646 1,024 5,636 3,405
Provision for income taxes 649 403 2,191 1,315
--------- --------- --------- ---------
Income from continuing operations 997 621 3,445 2,090
Loss from discontinued operations, net of tax benefit - (1) (1) (79)
--------- --------- --------- ---------
Net income $ 997 $ 620 $ 3,444 $ 2,011
========= ========= ========= =========
Weighted average shares outstanding:
Basic 2,264,029 2,192,426 2,231,848 2,189,197
Diluted 2,345,865 2,239,722 2,309,932 2,230,226
Earnings per share:
Basic - Income from continuing operations $ .44 $ .28 $ 1.54 $ .96
Basic - Loss from discontinued operations - - - (.04)
--------- --------- --------- ---------
Basic - Net income .44 .28 1.54 .92
========= ========= ========= =========
Diluted - Income from continuing operations $ .43 $ .28 $ 1.49 $ .94
Diluted - Loss from discontinued operations - - - (.04)
--------- --------- --------- ---------
Diluted - Net income .43 .28 1.49 .90
========= ========= ========= =========
________________________________________________________________________________________________________
VSE provides diversified services to the engineering, energy and
environment, defense, and homeland security markets from more than 15 locations
across the United States and around the world. For more information on VSE
services and products, please see the Company's web site at www.vsecorp.com or
contact Len Goldstein, Director of Business and New Product Development at
(703) 317-5202.
News Contact: C. S. Weber, CAO, (703) 329-4770
This news release contains statements which, to the extent they are not
recitations of historical fact, constitute "forward looking statements" under
federal securities laws. All such statements are intended to be subject to the
safe harbor protection provided by applicable securities laws. For discussions
identifying some important factors that could cause actual VSE results to
differ materially from those anticipated in the forward looking statements in
this news release, see VSE's public filings with the Securities and Exchange
Commission.
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